Contractors Fight Over Delays to NSA Data Center

Contractors working on a new National Security Agency data center in Utah are fighting over the causes and responsibility for electrical failures that have caused construction delays costing up to $50 million, project officials say.

The NSA's Utah Data Center, which has become a symbol of the agency's potent surveillance power, has been hobbled by the electrical failures, which have resulted in a series of fiery explosions, The Wall Street Journal reported earlier this month.

The lead contractor on the project says it has uncovered the cause of the explosions—a defect in electrical switches provided by a subcontractor—and is installing a fix. Outside investigators from the Army Corps of Engineers, which is overseeing the $1.4 billion construction of the center, say the contractors' explanation, and proposed fix, remain unproven.

Government officials managing the project are split over which side is right. Representatives from the lead contractor—a joint venture of Balfour Beatty Construction, DPR Construction and Big-D Construction Corp.—are scheduled to present their case at the NSA's Fort Meade, Md., headquarters on Tuesday.

The NSA has been building new centers around the country to house growing volumes of surveillance data. It recently completing a smaller facility in San Antonio and starting another at its headquarters. The Utah center, in Bluffdale, which will be NSA's largest at over one million square feet, isn't yet operational.

With millions of dollars at stake, contractors on the Utah facility are disputing several other issues with the government, project officials said. One involves more than $15 million in costs incurred due to unanticipated problems with the soil on which the center is built.

Responding to questions about electrical problems raised in the Journal article, the NSA wrote to lawmakers saying it didn't believe the failures were a big problem, but that the agency wouldn't accept the center until the problems were resolved, a congressional official said.

Asked about the continuing disagreement over the source of the failures, an NSA spokeswoman pointed to the letter to lawmakers, which said "mission systems" would be installed on schedule and within budget. The Army Corps of Engineers referred questions to the NSA.

One project official called the NSA's position "damage control," saying the issues were significant, and "the jury is still very much out on whether they have solved the problem."

The electrical problems, known as arc fault failures, have led to costs expected to run as high as $50 million, project officials say.

The cost solely for delays is estimated at $25 million, another project official said. The first phase of the project missed its October 2012 deadline and remains incomplete because of the electrical failures. Contract documents state the contractor must pay the government $50,000 for each day the project is delayed. Contractors also missed a Sept. 24 deadline to complete the entire data center, which could risk an increase in penalties to $100,000 a day.

Direct and indirect costs of the electrical failures themselves added $20 million to $25 million to the total cost, the official said. The contractor has spent about $5 million just to replace damaged electrical equipment.

"With all the delays and money and millions of dollars spent, because the number is so big, they're going to be pointing fingers," the official said. "We would have met the deadlines if had it not been for these failures."

The cause of the failures will be a key determinant of who is responsible and who must absorb the costs, officials said. The lead contractor's case cites a manufacturing defect in electric switches provided by Siemens AG, a subcontractor. The lead contractor says the failure occurs when a circuit breaker in a Siemens switch blows up.

"There are some parties who believe that the root cause has yet to be determined," said Connie Oliver, a spokeswoman for the lead contractors. "We believe the root cause has been determined. Until that is finalized, there is no decision about who absorbs the liability for the cost. It's not the government."

Siemens disputes this conclusion. "We are confident that our products are not a cause or even a contributing factor to the events," said Elizabeth Cho, a Siemens spokeswoman. She said Siemens has been working with the lead contractor, the government and others to implement solutions to "various possible root causes."

A competing theory, held by some government engineers, says there is a broader flaw in the electrical-system design that suggests wider responsibility by the lead contractor and the architectural firm that designed the system, KlingStubbins. A KlingStubbins spokeswoman didn't respond to a request for comment.

The second project official said electrical failures were bound to happen because of the unusual demands of the giant center: "This thing is a power hound. It's like buying a Ferrari and red lining it in every gear."

The NSA is really angry:1. they don't have the power they need and contracted for2. they wanted all the data from Obamacare....and now won't get it.3. they are really really upset that they won't get all voting records of all citizens until the 2014 elections at the earliest.

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